Construction Program Guide

Special Experimental Project No. 14 - Innovative Contracting

Since 1990, the FHWA has been allowing the State DOTs to evaluate non-traditional contracting techniques which are competitive in nature but do not fully comply with the requirements in Title 23 United State Code. Federal-aid construction contracts that utilize a method of award other than the lowest responsive bid must be evaluated under FHWA's Special Experimental Project No 14 (SEP-14) - "Innovative Contracting". The non-traditional practices originally approved for evaluation were: cost-plus-time bidding, lane rental, design-build contracting, and warranty clauses.

Based on the generally positive experiences of State DOTs, on May 4, 1995, FHWA decided that cost-plus-time bidding and lane rental were techniques suitable for operational use. Warranties became operational through an interim final rule on August 25, 1995.

On December 10, 2002 in response to section 1307 of TEA-21, FHWA published the final rule which established regulations for design-build contracting as 23 CFR Part 636. Subsequent modifications required by section 1503 of SAFETEA-LU resulted in revisions published in a final rulemaking on August 14, 2007. Among the revisions made by SAFETEA-LU were the elimination of the dollar thresholds for "qualified" projects; and permission to release an RFP or award a design-build contract prior to completion of NEPA. Design-build procurement processes which deviate from the requirements of 23 CFR 636 may require an SEP-14 work plan and approval.